The Senate Standing Committee on Finance has opposed a proposal to grant sales tax exemptions on the import of aircraft and aircraft parts exclusively to Pakistan International Airlines Corporation Limited (PIACL), recommending that the relief be extended to all airlines operating in the country to ensure a level playing field.
The committee reviewed recommendations related to the Finance Bill 2026-27 and completed its clause-by-clause examination of proposed amendments to the Sales Tax Act and the Federal Excise Act during its meeting on Sunday.
Chairman of the committee, Senator Saleem Mandviwala, strongly objected to restricting the exemption solely to PIACL, arguing that such a move would unfairly discriminate against other players in the aviation industry.
“This is outright discrimination and should not be allowed. If tax relief is being provided, the entire aviation sector should benefit from it,” he said, cautioning that limiting the exemption to a single airline could result in legal challenges from other carriers.
Mandviwala urged the Ministry of Finance, the Tax Policy Unit, and the Federal Board of Revenue (FBR) to revise the proposed schedule of the Sales Tax Act and include all eligible airlines in the exemption framework.
Responding to the committee’s concerns, Finance Minister Muhammad Aurangzeb explained that the proposed exemption had been introduced in connection with the planned privatisation of PIACL and was intended to facilitate the acquisition of new aircraft during the process.
He added that any decision to extend similar tax concessions to all airlines would require consultation with and approval from the International Monetary Fund (IMF).
Despite this, the committee agreed to amend the proposal and formally recommended that the sales tax exemption be broadened to cover all qualifying airlines rather than being limited to the national carrier.
The panel also approved several other measures under the Finance Bill, including proposals aimed at accelerating the digitisation of the Federal Board of Revenue and implementing its faceless Inland Revenue system to improve efficiency and transparency.
In addition, members discussed security arrangements for the upcoming Shanghai Cooperation Organisation (SCO) summit, highlighting the importance of bulletproof vehicles and seeking details regarding the number and specifications of vehicles required in light of prevailing security concerns.
The committee further approved the expansion of the Third Schedule of the Sales Tax Act by adding new items that would be subject to sales tax based on their printed retail prices.
It also endorsed amendments to the framework governing the disposal of confiscated goods, allowing auctions of seized items to be conducted through an electronic auction system under the revised rules.
The recommendations will now form part of the committee’s input on the Finance Bill 2026-27 before its final consideration by Parliament.
